Nvidia’s stock fell 3% on Friday as the Biden administration prepares to release new rules limiting exports of AI chips used in data centers. The restrictions aim to curb the development of artificial intelligence in US adversary countries such as Russia and China.
According to analyst Gil Luria, Nvidia chips account for up to 40% of sales in China, where advanced chipmaking technology is not available. Limiting these exports could significantly impact revenue.
Nvidia vice president Ned Finkle stated that the restrictions would harm the US economy and set America back. Industry experts echo his concerns, warning that the rules would limit market opportunities for US companies while providing an open door for foreign suppliers of AI chips.
The tech policy think tank Information Technology & Innovation Foundation said that the proposed framework fails to address the core challenge in a targeted way, which could have catastrophic consequences for the US digital industry. Analysts at Bank of America noted that demand for consumer AI computers has been lackluster, contributing to the chipmakers’ decline.
TSMC’s strong December quarter sales offered some relief, but Nvidia stock remains volatile until its quarterly earnings report on Feb. 26. Despite this, analysts maintain a bullish outlook and have upgraded their ratings.
Source: https://finance.yahoo.com/news/nvidia-chip-stocks-drag-tech-lower-as-new-biden-export-rules-jobs-report-weigh-170230494.html